Every year, just as Hercules cleansed the Augean Stables, some NFL teams undergo a thorough reorganization of their coaching staffs. This annual exercise in bloodletting, known as Black Monday, takes place on the first Monday after the last Sunday of the regular season. There were seven coaching changes on Black Monday for the 2014-15 season, seven for the 2013-14 season, and eight for the 2012-13 season.
This year Black Monday is on January 4, 2015. Three coaches, Ken Whisenhunt of Tennessee Titans, Joe Philbin of Miami Dolphins, and Chip Kelly of Philadelphia Eagles, were fired midseason and several other teams are expected to fire head coaches on Black Monday.
Every team spends significant time and money on hiring the right coach, in the belief that who you hire is what you become. There are usually two types of teams that make coaching changes due to involuntary separation: teams that perform poorly (suffering from the performance gap) and good teams that under-perform (suffering from the opportunity gap). In both cases, teams need quality coaches to improve their on-field performance.
Teams planning changes on Black Monday can learn a lot from research on NFL coaches. And it turns out that these research findings hold value not only for football teams, but for any organization that depends on leadership for success.
An empirical study of coaching ability
In 2009, scholars Tim R. Holcomb, R. Michael Holmes Jr., and Brian L. Connelly used 1980–2000 NFL data to pursue an important question: Can able managers create value for their organizations by applying the resources at their disposal, and are they thus a source of competitive advantage? In general, NFL head coaches are responsible for player management and tactical decision making; they are thus analogous in function and authority to CEOs. Because coaching records, player statistics and team performance are readily accessible, measurement and comparison of organizational performance in the NFL is reliable and consistent.
Football coaches use players in specialized combinations—offensive formations for passing and running, defensive formations to protect the pass and the run—that Holcomb, Holmes Jr., and Connelly called resource bundles. Head coaches rely on their evaluations of players’ skills, and they reallocate players with specific skills and abilities to appropriate positions and plays in response to rivals’ anticipated and actual behavior in game scenarios. Furthermore, coaches are subject to constraints on the number of players allowed on their rosters and on the budget available to spread across their rosters. In other words, optimizing the productivity of one resource bundle might produce a loss of productivity in another resource bundle.
As a result, a team’s performance on the field depends not only on the productivity of the team’s resource bundles, but also on the coach’s ability to build a roster of players with specific skill sets, to allocate players within and between resources bundles, and to deploy them in ways that maximize their contributions. Such decisions were collectively defined by Holcomb, Holmes Jr., and Connelly as resource synchronization.
The researchers analyzed team performance (team winning percentage each season) and resource productivity in terms of managerial ability (measured by the head coach’s prior coaching record) and resource quality (measured by the number of MVP, Pro Bowl, and all-conference players on a team), with resource synchronization as an intervening variable of organizational performance. They used control variables to take into account in-season coaching changes, strike-shortened seasons, league expansions and reorganizations, the introduction of a salary cap, drag on team performance due to divisional rivalries, player-selection skew due to a team’s draft position, and other important factors.
Lessons with applicability to management
Holcomb, Holmes Jr., and Connelly’s work produced important findings that offer lessons about coaching--and potentially about corporate managerial leadership as well.
First, coaches differ measurably in their ability to utilize and deploy resources, a difference that explains the competitive advantage enjoyed by some teams. Good coaches use resources at their disposal efficiently, and maximise their potential to the team. This ability of good coaches is a source of competitive advantage for some teams, which translates into improved on-field performance.
In a similar fashion, CxOs and team leaders in the corporate world should be viewed as a source of competitive advantage for firms. Attracting, developing, motivating, and retaining great managers and leaders can also result in improved performance.
Second, coaches’ ability to create value depends on the quality of the resources at their disposal. When a team’s resource portfolio is not stellar, an able coach has a more noteworthy effect on productivity and performance. The worse the situation, the more important the coach. In a corporate world, this phenomenon is more acute in cases of organizational turnarounds. Thus, Holcomb, Holmes Jr., and Connelly argued that “firms must pay close attention both to their resource endowment and to the ability of their managers to extract value."
The tale of three coaches
Consider the historical cases of three leaders who coached the Dallas Cowboys over the past three decades: Bill Parcells, Barry Switzer, and Jimmy Johnson.
In 2003 Bill Parcells unexpectedly returned to professional football as head coach of the Cowboys. Parcells had retired four years earlier to universal acclaim as a rebuilder of struggling franchises: he had turned around, in succession, the New York Giants, the New England Patriots, and the New York Jets.
The Cowboys franchise—winner of five Super Bowls—had fallen on hard times. In the previous three years, the team had failed to make the playoffs even once. Desperate for a return to the team’s glory days, owner Jerry Jones coaxed Parcells out of retirement. Parcells went on to coach the struggling Cowboys to a 34-30 record in four years, including a 10-6 record his first year. The team made the playoffs twice during Parcells’ tenure, and he was credited with building the core of a team that chalked up a 33-15 record in 2007–2009, after his retirement, including two division titles.
In 1989, fourteen years before hiring Parcells, Jerry Jones’ first act as the Cowboys’ new owner was to fire the legendary Tom Landry after a miserable 3-13 season, and hire Jimmy Johnson away from the University of Miami to join the team as only the second head coach in Cowboys' history.
Despite no prior NFL experience, Johnson immediately made his mark on the team and demonstrated an uncanny ability to pick talent by drafting future Hall of Famer Troy Aikman and several future Pro Bowlers. Later, he fearlessly traded Herschel Walker at the peak of his NFL career for multiple players and picks (which he used to draft future Hall of Famer Emmitt Smith and three future Pro Bowlers. In 1990, the team posted a significantly improved 7-9 record; the next year the Cowboys finished 11-5 and made it to the playoffs.
In 1992, the Cowboys won the NFC East and went on to win the Super Bowl, making Johnson the first coach in history to win a college national championship and a Super Bowl title. Six Cowboys played in the Pro Bowl that year. The Cowboys repeated as Super Bowl champions in 1993, posting a 12-4 record, defending their NFC East title and ranking second in the league both offensively and defensively.
At the end of the season, Jimmy Johnson resigned as head coach, unable to work harmoniously with Jerry Jones. Jones hired Barry Switzer of the University of Oklahoma as Johnson’s replacement.
Like his predecessor, Switzer had no NFL experience, but he had inherited a top-flight team with stars like Troy Aikman, Emmitt Smith, and Michael Irvin on offense and 11 Pro Bowlers in all.
The Cowboys finished the 1994 season with a 12-4 record, winning the NFC East again but lost the NFC title game. In 1995, despite the loss of veteran players, the team posted another 12-4 record, winning the NFC East and a fifth Super Bowl. Switzer became the second coach (after Jimmy Johnson) to have won a college national championship and a Super Bowl title.
The Cowboys won the NFC East again in 1996. Switzer resigned in 1997 after the team failed to make the playoffs for the first time, primarily because of the diminishing abilities of a few star players.
What can business leaders learn from the tales of these coaches as well as relevant academic research? Overall, great managers create value and organizational performance by deploying and leveraging the resources at their disposal more effectively than their less capable counterparts.
Furthermore, though managerial ability does indeed significantly affect resource productivity and organizational performance, this effect is more pronounced in the case of less resource rich portfolios. Many pre-Black Monday discussions focus on whether coaches really matter and how much. Coaching ability is crucial in leading and managing the team that results in ascendancy over competitors. But they matter more in turnaround situations.
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Boris Groysberg is a professor of business administration at Harvard Business School and the coauthor, with Michael Slind, of Talk Inc. (Harvard Business Review Press, 2012). His work examines how a firm can be systematic in achieving a sustainable competitive advantage by leveraging the talent in all levels of the organization. Follow him on Twitter @bgroysberg. Abhijit Naik is an independent researcher.